Interests: The Monetary Future, at the intersection of free banking, cryptography, and digital currency. http://themonetaryfuture.blogspot.com

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Please see Hal Finney's work on reusable proof of work and Adam Back's work on Hashcash. I think people in banking would benefit from an understanding of RPOW as token money before they advance to the workings of a distributed block chain, which is essentially the prevention of double spends.
http://en.wikipedia.org/wiki/Proof-of-work_system#Reusable_proof-of-work_as_e-money …

The Bitcoin community have been educating me lately in how their currency can not be regulated. This stems from my assertion that money was created to control people and therefore you cannot have money without government. The Bitcoin guys tell me that once you’ve converted your currency into bit...

Over the last few months there have been a spate of articles on the evolution to a cashless society as the use of mobile devices continues to grow around the world. The Death of Cash, Time for Cash to Cash Out?, Visions of a Cashless Society, and Why Cash is Losing its Currency? are some of the...

I agree with the remark that the anti-cashist's are really about limiting choice. It may be even simpler than that -- do you or do you not want a future with the ability for transaction privacy? That's why 70% said yes!

The debate about cash is a regular one, and it does roll on and on. Last week’s debate at the Financial Services Club is no exception, and was argued well by heavyweights in opposing corners. In the case for cash, Adam Lawrence of the Royal Mint and Ken Howells of the LINK ATM network put forwar...

Several people pinged me yesterday to highlight the fact that Bitcoin has now become a target of the major payments processors. Not for acquisition. Not for partnership. Not for joint ventures. Not for support. No. Bitcoin is obviously becoming a threat to mainstream operations as it is now an a...

It is a dis-service to lump bitcoin together with "other currencies attempting to displace cash out there." It is singularly unique and not just because it "has garnered the most media attention in the past year."
When comparing it to Ven or Flatr or any even negotiable e-currency in the digicash mold, bitcoin stands as the first network-based system without a single point of failure for the authorities to attack. This is largely due to the distributed bitcoin nodes that solve the double-spending problem, something that previous decentralized systems were unable to do. See, http://themonetaryfuture.blogspot.com/2011/10/bitcoin-dangerous-to-surveillance-state.html

Talking with some of the Financial Services Club sponsors last week, it is clear that there is still a debate raging about the future of cash. Like the future of branches, which both Brett King and I discuss endlessly, cash is one of the other traditional bastions of the old guard of financial ...

Elpresidenten01, there is no absolute method to determine transaction types/purposes, but the commercial transactions portion can be best approximated by the 'Bitcoin Days Destroyed' metric pointed out by bitcoinmoney, which will tend to strip out the short-term transactions to oneself.
Also, keep in mind that as more eWallet service providers (MyBitcoin.com) and exchangers that maintain accounts (MtGox.com) come online, those intra-account transfers will be excluded from any metric because they occur outside of the bitcoin block chain.

Anyone in the e-payment space will not have failed to notice the attention that Bitcoin has been attracting over the last few weeks. I have to say that I was surprised by the interest from journalists -- I was even interviewed for the Wired podcast and for New Scientist -- for what is, after all...

Steven, the gentleman that recently had $500k worth of bitcoin hacked and stolen will be glad to hear from you that "it is quite easy to trace" and that "the source of that money will be known". Also, your encouraging statement that "the flows of money will get tracked down fairly quickly" should provide him some additional comfort as he comes to terms with this theft.

Anyone in the e-payment space will not have failed to notice the attention that Bitcoin has been attracting over the last few weeks. I have to say that I was surprised by the interest from journalists -- I was even interviewed for the Wired podcast and for New Scientist -- for what is, after all...

Anyone in the e-payment space will not have failed to notice the attention that Bitcoin has been attracting over the last few weeks. I have to say that I was surprised by the interest from journalists -- I was even interviewed for the Wired podcast and for New Scientist -- for what is, after all...

Hi Chris,
Having worked for VISA and then for VeriSign on payments and banking, I have to agree with you. I have been thinking those same thoughts but never put in on paper. Well done, someone has to say it.
It seems as though the world has stood still with respect to payments (maybe even slightly backwards). PayPal was originally created to be a killer of government money -- instead they have morphed into a mere pass-thru mechanism. e-gold had 1/3 Paypal's volume at their peak and they were snuffed out by the US government, because they were guilty of maintaining customer's financial privacy.
The true 'innovation' that will matter is how to advance from a paper $100 bill to a digital $100 bill without losing the anonymity and privacy features of the paper cash. It hasn't been done yet, because governments don't want that innovation. In the meantime, we should reject all digital monies until, at a bare minimum, it can maintain the privacy of a simple paper $100 bill.
--Jon Matonis
http://themonetaryfuture.blogspot.com

Many of us get excited about new and different toys in the payments world. From Jack Dorsey’s twittering Square to PayPal’s billions of payments, we think the world is changing dramatically. SMS texting payments in Africa and credit exchanges on Facebook add weight to our arguments for change...

Max,
Thanks again for also guest posting this article on The Monetary Future blog at http://themonetaryfuture.blogspot.com/2010/02/virtual-currency-and-money-laundering.html
It's easily a topic that could be updated since the environment is moving so quickly. I have added a significant 'For further reading' section at the end of the post which provides an excellent three-year bibliography on virtual world money laundering. Please take a look.

After looking at the necessity of proper policing in virtual worlds yesterday, let's take a look at just how prevalent cybercrime really is. As the Hindu Business Line reports, cybercrime - both small-scale phishing and large-scale acts like cyberterrorism and mass account information theft - ...

Max,
I think that the ability to simply purchase related in-world goods and to pay for monthly membership fees is a distraction.
The primary reason that 'Chaumian' digital cash die-hards (like me) from the late '90s are intrigued by virtual currencies is that they offer the promise of a non-political monetary unit that can have a broad appeal, if properly backed. See Open Metaverse Currency (OMC)at https://www.virwox.com for an early example of what is possible. Also, see http://www.hypergridbusiness.com/2010/03/in-world-payments-come-to-opensim-grids/
Furthermore, unlike PayPal and VISA, virtual money units can be digitized and remain both anonymous and untraceable. Digital currencies that can be earned in-world and also have exchange value in the real world (for goods, services, etc) will not require credit cards to survive. They will represent the digital equivalent of being paid in $100-bills at your place of work (tax-free, just like the Austrians at George Mason University would be proud of). To gain market share and rapid adoption by the public, a successful virtual/digital currency can have greater anonymity and untraceability than that of a paper $100 bill, but it CANNOT have LESS.
--Jon Matonis

From FarmVille Dollars to the Evony Cent, nearly every virtual world, multiplayer game and online environment seems to be adopting synthetic currencies - the little tokens we happily give our real money to acquire. Virtual currencies each have their own exchange rate, from L$250 to $1 in Second ...

Dear Ron,
I have recently switched to Creative Commons Attribution 3.0 (http://creativecommons.org/licenses/by/3.0/us/) for my personal, original content (please feel free to reprint whatever of my articles that you'd like to on your blog). Thank you for being an interested reader of "The Monetary Future". Where the posted articles are not written by me directly or are not covered by CC 3.0 (i.e. the Mises Institute), I either know the authors personally and/or I have received permission to reprint. Being a small non-profit, educational site, the larger news organizations are not concerned with the attributed news feed; however, if any of them objected to a particular piece, we would remove it and provide a summary link instead. When it comes to the smaller 'newsletter' type organizations, we are very careful to seek permission so as not to impact their ability to earn revenue and if appropriate, we provide a link to their subscription page.
It is rarely an issue to receive permission to reprint a relevant article with attribution. In the case of Mr. Duranske, the reference was removed at his request and then replaced with an Amazon book link in order to promote his excellent book, which was the original intent anyway. He has since granted permission to reprint that entire piece once he understood the context. I don't think it's fair of me to have non-germane comments on Max's blog, so if you seek further clarification, please contact me directly at matonis@yahoo.com and I will answer you promptly. Thank you.
--jm

We recently wrote that developers were fighting a failing battle by trying to restrict secondary virtual goods markets through tools such as account banning and eliminating in-game trade. Now an article published by the CIOL Network seems to agree: Fighting the market in in-game goods will not...

I tried to refrain but I just have to answer Hiro's diatribe above. In the 16 years that I have been on the Internet, I have never had anyone say "Eat me" during a commenting discussion (see above...that was a first). I must have really touched a nerve or something!?!
Getting back to the debate however, I'll address each one of your four points above.
1. Pressing China on trade - this would be the antithesis of the free market because the black market is the free market. The goldfarming trade has provided opportunities for the poor in China where none existed before. The Chinese government doesn't exist to enforce laws for you to play MMOGs.
2. Yes, developers are the solution and there is notable progress in this area.
3. No one is suggesting that governments should legislate that MMOGs HAVE TO allow RMT as part of their game, so this is really off track. RMT is a creature of the free market and governments have no right legislating game environments. Just as governments have no right legislating that people cannot pay for things with anonymous, untraceable cash or gold bars. Inversely, the government coercion would come from legislating the banning of RMT (because ultimately that is an EULA enforcement issue).
4. Lastly, NO ONE should be speaking to Congress about more laws for virtual worlds and MMOGs. That is the total incorrect path to be going down (seeking shelter from the nanny-state because some one took your marbles, come on?). Hiro, you and the rest of the RMT-banning crowd need to stick with the ever-diminishing games that suit your preferences or adapt to the reality of cash-in, cash-out, vibrant two-way free-market capitalistic money exchange. Black markets cannot be stamped out and the more that people try, they morph into something different and they survive and prosper! That's exactly what the black market is and I, for one, am thrilled that the black market is alive and well in virtual worlds. Black markets exist for one simple reason and that is that people demand things!
Also, I would answer your last sentence by asking you why the hell do you feel the right to address monetary economics, foreign exchange issues, virtual currencies, and value exchange without the experience to understand the market dynamics that give rise to goldfarming in the first place?

We recently wrote that developers were fighting a failing battle by trying to restrict secondary virtual goods markets through tools such as account banning and eliminating in-game trade. Now an article published by the CIOL Network seems to agree: Fighting the market in in-game goods will not...

We recently wrote that developers were fighting a failing battle by trying to restrict secondary virtual goods markets through tools such as account banning and eliminating in-game trade. Now an article published by the CIOL Network seems to agree: Fighting the market in in-game goods will not...

The California Gold Rush of 1849 flooded the West with prospectors chasing dazzling riches. It also created a boom market for general stores, taverns, brothels, and government where previously there had been only desert. If the current boom in the profitability of virtual worlds is any indic...

We recently wrote that developers were fighting a failing battle by trying to restrict secondary virtual goods markets through tools such as account banning and eliminating in-game trade. Now an article published by the CIOL Network seems to agree: Fighting the market in in-game goods will not...

Hiro,
Max had an intelligent post here regarding market-based methods of managing the real money trade for virtual goods. The MMOGs are the one place that we can go where governmental, state-coerced policies have not infiltrated yet, which is why he poses market-based solutions/ideas.
You could have intelligently contributed to that discussion (and this blog) instead of dragging the discussion down with comments that everything you disagree with is some form of b.s. For instance, without using checkers or developer-sanctioned game rigging, please explain to the readers of this blog why you would oppose a free-market solution to the RMT dilemma.

We recently wrote that developers were fighting a failing battle by trying to restrict secondary virtual goods markets through tools such as account banning and eliminating in-game trade. Now an article published by the CIOL Network seems to agree: Fighting the market in in-game goods will not...

Hiro,
Money is coming to games and other virtual environments and I don't really think it can be stopped!
Egalitarian and welfare worlds will also exist just like they do in the real world (probably virtual welfare and food stamps too). Please just don't overlay your utopian, socialist b.s. concepts on the entire MMORPG universe.
--Jon
http://themonetaryfuture.blogspot.com

We recently wrote that developers were fighting a failing battle by trying to restrict secondary virtual goods markets through tools such as account banning and eliminating in-game trade. Now an article published by the CIOL Network seems to agree: Fighting the market in in-game goods will not...